Movies: Past, present and future

Universal's 'Tower Heist' VOD gamble: A crafty gambit?

October 6, 2011 | 4:40pm

Universal's plan to make its upcoming "Tower Heist" thriller available through video on demand just three weeks after its theatrical release next month sparked a fascinating initial reaction from theater owners -- silence. In the past, when studios tried to shorten the windows on their theatrical releases, movie exhibitors were quick to respond with outrage, denunciations, veiled threats and much gnashing of teeth. But this time theater owners didn't shoot from the hip.

When Ben Fritz, my colleague who broke the story, checked in with executives and representatives from the three major exhibition chains, along with a spokesman for the National Assn. of Theatre Owners (NATO), he got nothing on the record at all. Zip. Nada. It took until late today for Cinemark, one of the Big Three Exhibitors, to finally release a statement saying that if the studio moved forward with its plans, Cinemark wouldn't book the film.

So what gives? My sources say that Universal, knowing it was playing with fire, went out of its way to warn exhibitors in advance about its plans. As Fritz noted in his story, the studio has also offered assurances that theater owners would be compensated if ticket sales in the two VOD test markets were lower than expected during the test viewing period.

That doesn't mean that exhibitors are exactly overjoyed. After all, if the test is successful, it would lead to a dramatic upheaval in the business, with studios creating a lucrative new window for selling movies between the theatrical run and the DVD release.

It would be great for consumers, especially the millions of potential moviegoers who simply no longer want to deal with the hassle of seeing films in a theater. It would also be great for the filmmakers who are being squeezed out of the business because studios are increasingly geared toward marketing superhero blockbusters, not the kind of more modest dramas that might play especially well in home theaters.

The studio's price tag is a bigger question mark. "Tower Heist" has big stars (Ben Stiller and Eddie Murphy) and an easily identifiable genre -- as the title suggests, it's a heist movie -- but is really worth $60? If the reviews are lukewarm when it's released Nov. 4, will there really be a big enough audience willing to pay more than four times what they would pay in a theater? Or will they happily wait to watch it on DVD or rent it later on, for a fraction of the cost?

It will be interesting to see if the other exhibitors follow Cinemark's lead and refuse to show the movie. Or if they keep an open mind. If I were an exhibitor, I'd be willing to let Universal do some bona fide market research before I got too carried away.

If the experiment works, there will still be time for the exhibitors to go after what they really want -- a piece of the action. If the studios do anything that actually undermines the exhibitors' modest profit margins, they are going to have to find a way to do what they have so far been unwilling to do -- make exhibitors their partners. If this kind of experiment ends up creating a new way for studios to make up for the money they are losing from the evaporation of the DVD market, that may be the real endgame.